Michigan Residents Making Less Money

How a decline in your neighbors paycheck could have a big effect on your workers compensation benefits if you get hurt at work.

MLive.com published an interesting article last week about declining wages in Michigan. Not only have we lost thousands of jobs over the last 10 years but paychecks have gotten smaller compared to other states.

“Adjusted for inflation, annual private sector wages fell $2,488 in Michigan during the last decade, but rose $3,008 for all U.S. workers.”

The article points out that this $5,500 wage gap is the equivalent of nine months average rent in the Detroit area or nine months worth of groceries for a four-member family in Grand Rapids.

Trickledown effect

This “wage gap” could have an important effect on individuals who are hurt at work. Payment of lost wages under workers compensation is tied directly to the state average weekly wage. This means as wages go down so does the maximum weekly rate.

The injured worker is generally entitled to 80% of his or her after-tax average weekly wage. This comes out to be about 60% of gross pay. These lost wages are paid for as long as the person is totally disabled from work.

However, wage loss benefits are capped at 90% of the state average weekly wage. This means that an injured worker cannot receive more than $798 per week in 2013. It does not matter how much the person was actually earning. This can be devastating for high wage earners who must now face a substantial drop in pay.

Possible solution

It is time we abolish the maximum weekly rate and put a system in place that more fairly represents actual earnings. This is especially true now that insurance companies are free to use an individual’s  “wage earning capacity” to reduce the payment of benefits.

We should also start increasing wage loss benefits based upon inflation. Just like the federal government does with Social Security disability benefits.

To speak with one of our workers compensation lawyers in Michigan, call (855) 221-2667 for a free consultation. We are committed to protecting the rights of injured workers.

Alex Berman is the founder of Michigan Workers Comp Lawyers. He’s been representing injured and disabled workers exclusively for more than 35 years. Alex has helped countless people obtain workers comp benefits and never charges a fee to evaluate a case.

Related information:

Michigan workers compensation attorney explains the maximum weekly rate and how to calculate your 2013 wage loss benefits.

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